Question
Labor Variances Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set the following standards
Labor Variances Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set the following standards for materials and labor: Leather (3 strips $4) Direct labor (0.75 hr. $12) Total prime cost $12.00 9.00 $21.00 During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 287,500 strips at $4.50 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 80,300 hours at $15.00 per hour. Required: 1. Break down the total variance for labor into a rate variance and an efficiency variance using the columnar and formula approaches Rate variance Efficiency variance Total variance x Unfavorable Unfavorable Unfavorable x 2. CONCEPTUAL CONNECTION As part of the investigation of the inform
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